Dow Shoots Up 78.71 as Oil Prices Decline

NEW YORK —  Wall Street stocks surged today, with the Dow Jones industrial average closing with a gain of nearly 80 points as oil prices plunged from their lofty levels of last week.

The Dow index of 30 shares closed with a gain of 78.71 points, equal to 3.11%, at 2,611.63. Advancing issues outnumbered declines by nearly 6 to 1 on the New York Stock Exchange, with 1,464 up, 252 down and 271 unchanged.

Big Board volume totaled 160.15 million shares, against 199.04 million in the previous session.

The NYSE’s composite index climbed 5.14 to 176.19.

The stock market received its boost from a drop of more than $4 a barrel in crude oil prices. (Story, Page 3.)

In addition, stocks were helped by a rising bond market, reflecting hopes that lower oil costs would help keep inflation under control.

Brokers said investors also were heartened by conjecture that the Federal Reserve had become increasingly willing to relax its credit policy as recession worries intensified of late.

Stocks began to recover on Friday, when the Dow Jones industrial average climbed 49.50 points from its lowest level in more than 13 months.

Analysts said the market gathered fresh momentum over the weekend when fears of war in the Persian Gulf went unrealized.

At the same time, many of the Street’s chart-watchers argued that stocks were ripe for a rebound after their steep drop since mid-July.

The value of the dollar dropped in foreign exchange as it appeared the worst of the Iraqi crisis may have passed. The dollar’s value typically is supported in times of international turmoil by investors who buy the currency as a safe haven.

And the price of gold plummeted in broad-based selling also related to optimism on the Mideast situation.

On the New York Commodity Exchange, gold for delivery in December closed down a sharp $27 to $396.20 an ounce, below the psychologically important $400 level.